Co-development agreement between ZDF, Deutsche Telekom and The Fantastic Corporation

ZDF, Deutsche Telekom and The Fantastic Corporation announced their intent to co-develop a series of exiting new media services for the German mass-market. ZDF, which is Germany's leading broadcaster with a daily reach of 36 million households, will provide the content over a bouquet of enhanced digital TV channels. Deutsche Telekom, Europe's largest telecommunications company, will use its nationwide infrastructure to transmit the content across the country. The Fantastic Corporation will provide its broadband content distribution and management software to enable the distribution of the content. The three companies will jointly specify requirements for the receiving hardware and work with hardware vendors.

The services will deliver all categories of digital multimedia to Internet enabled devices at high and consistent speed. Fantastic's software allows end-consumers to experience a single medium whereby web content is seamlessly integrated with televised content. The solution overcomes the bottlenecks of the Internet by providing the bandwidth sensitive media elements through a delivery mechanism, which is infinitely faster than the World Wide Web.

The agreement between the three companies follows the completion of a series of successful wireless broadband pilots conducted throughout 1999. One of these pilots, shown to the public at IFA 99 in Berlin, included the car manufacturer BMW and demonstrated how the new technology could be utilized for effective delivery of broadband multimedia into cars at a speed of 16 megabits per second - 1,400 times faster than the data rates of GSM phones. Another pilot was conducted with mobile phone leader Nokia, showing handheld devices, successfully receiving multimedia content. The communication speed was 14.95 megabits per second - enough to support several simultaneous TV quality video streams in the palm of the user's hand. Both pilots were based on unidirectional broadband content delivery combined with an option to dial back over a mobile phone.

Commented Reto Braun, Chairman and CEO of Fantastic: "This venture is the beginning of a new era for Fantastic where we increasingly build on our international successes. As an enabler of corporate broadband communication, this is a first important step into the much larger consumer arena. I believe that these services will change the paradigms of Internet, broadcasting and mobile communication. This will stimulate a new wave of innovative media applications and services in and beyond Germany."

Professor Dr. A. Ziemer, Executive Vice President Production & Engineering of ZDF commented: "We believe that digital media has reached an inflection point where the distinction between broadcasting and the Internet will break down. Electronic media will be broadband, always-on, and available everywhere. For the user, this will mean a new and vastly improved experience: broadcasting and Internet becomes one. For content providers like ourselves this will open up a new way to bring our services and content to our clients, even when they are not at home. Together with our partners, we look forward to driving this step in reception technology in Germany."

Added Mr. Volker Steiner, spokesperson of management of Deutsche Telekom: "Europe has over the last few years developed strong leads in digital broadcasting and mobile communications. We look forward to building on our long-standing relationship with ZDF and our more recent alliance with Fantastic to provide innovative services to the German consumer market." Deutsche Telekom operates Europe's largest Internet service provider, T-Online, Europe's largest cable network, Europe's largest telephone network and is a leading shareholder in the world's two largest direct broadcast satellites operators.

The partners expect that the first services will be available to the consumer in the second half of 2001.